Mich. Admin. Code R. 206.25 - "Homestead" defined

Rule 25.

(1) "Homestead" means a dwelling, or a unit in a multiple unit dwelling, which is subject to property tax or a service charge in lieu of taxes pursuant to section 15a of Act No. 346 of the Public Acts of 1968, and is occupied as a home by the owner or renter. Real property classified as agricultural land for property tax purposes is part of a person's homestead under any of the following conditions:

(a) If the gross receipts from the taxpayer's agricultural or horticultural operations are greater than his household income, all taxes on farmland may be claimed for credit.

(b) If gross receipts from the taxpayer's agricultural or horticultural operations are less than his household income, the credit for property taxes is limited to the property taxes on land that he has lived on for 10 years or more and which is adjacent or contiguous to his home.

(c) If the taxpayer has not lived on the land for 10 years and the gross receipts from agricultural or horticultural operations do not exceed the taxpayer's household income, only the taxes on the home and 5 acres of land may be claimed for credit.

(2) The taxes on a homestead, which is an integral part of a larger unit of assessment, shall be the proportion of the total property tax that the value of the homestead is to the total value of the assessed property.

(a) Example 1. The taxpayer is an insurance agent and is using the first floor of his 2-story house as a business office. He and his wife live on the second floor. Assuming the value of the real property used for business is equal to the value of the real property used as a home, the taxpayer may claim for credit one-half of the property taxes.

(b) Example 2. The taxpayer has converted the second floor of his home to an apartment which he rents for $175.00 per month. To determine the property taxes applicable to the apartment, the annual rent of $2,100.00 (12 x $175.00 = $2,100.00) is multiplied by 17%. This amounts to $357.00 which is subtracted from the total property taxes assessed to arrive at the homestead property tax the taxpayer may claim for credit. This example is used when the homestead is a part of a larger unit of assessment and that portion of the assessed property not used as a homestead by the taxpayer is rented or leased to another person who occupies it as his home.

(3) A mobile home or trailer coach in a trailer park is a homestead. See R 206.28 for the property taxes that may be claimed for credit by persons residing in a mobile home in a trailer park.

(4) A nursing home or foster care home or home for the aged is the homestead of a permanent resident. A homestead maintained elsewhere by the spouse is considered a part of the same homestead.

(5) A single person who is a permanent resident of a nursing home, foster care home, or home for the aged and also owns the house he formerly occupied may claim for credit either the taxes on the house or his share of the taxes paid by a nursing home, foster care home, or home for the aged, but not both.

(6) See R 206.28 for the property taxes that may be claimed for credit by a person residing in a nursing home, foster care home, or home for the aged.

Notes

Mich. Admin. Code R. 206.25

1979 AC